Pre-commencement disposal: sale executed before winding up upheld, land ceased to be company asset at presentation.

The managing director validly executed and registered a sale of company land before the winding-up petition was presented; where the memorandum allows land dealings and the articles confer broad management powers on the managing director, those powers include disposing of immovable property in the course of the company's business absent evidence of board restriction, and statutes conferring court leave for sales after commencement do not apply to pre-commencement transactions. Operatively, the pre-petition sale is upheld and the land ceased to be an asset of the company at presentation of the winding-up petition.

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Issues: Whether the sale deed executed and registered in favour of the petitioners by the managing director of the company prior to presentation of the winding up petition was valid and accordingly whether the land in question ceased to be an asset of the company in liquidation.

Analysis: The sale deed was executed and registered on October 25/30, 1980, prior to the presentation of the winding up petition in February 1982. The memorandum of association includes colonisation as an object, involving purchase and sale of land. The articles of association confer broad management powers on the managing director to manage the company's affairs on behalf of the board. In the absence of evidence that the board had restricted the managing director's authority, those powers include disposing of company immovable property in the course of the company's business. Section 537 (leave of court for sales after commencement of winding up) is inapplicable because the transaction preceded the commencement. Authorities and principles recognising bona fide dispositions in the interests of the company during pendency of winding up proceedings support upholding valid pre-commencement transactions.

Conclusion: The sale deed executed and registered by the managing director is valid; the land was validly sold to the petitioners and was not an asset of the company at the time of presentation of the winding up petition. The petition is allowed.

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